Asia-Pacific Markets Mixed Amid Geopolitical and Federal Reserve Uncertainties
Asia-Pacific markets opened the week with a mixed performance as investors grappled with heightened geopolitical risks surrounding Iran and a stunning criminal investigation into U.S. Federal Reserve Chair Jerome Powell. These developments overshadowed a record-setting session on Wall Street and cast a cloud over regional sentiment.
Oil prices retreated from earlier gains despite entering a third week of deadly protests in Iran, with reports indicating President Donald Trump is weighing potential intervention. Brent crude futures fell to $63.05 per barrel. Conversely, spot gold prices surged more than 1.6% to an all-time high of $4,581.29 per ounce, reflecting a strong flight to safety among investors.
Regional Divergence and Currency Moves
Australia's S&P/ASX 200 rose 0.48%, while South Korea's Kospi fell 0.4%. Shares of logistics firm Hyundai Glovis jumped over 4% after analysts raised price targets, buoyed by its controlling stake in Boston Dynamics, which recently announced an AI partnership with Google DeepMind. Hong Kong and mainland Chinese indices posted modest gains.
India's benchmark indices, the Nifty 50 and BSE Sensex, both declined by about 0.6%. Japanese markets were closed for a holiday, but the yen weakened sharply, hitting a one-year low of 158.19 against the U.S. dollar amid political uncertainty. Reports suggest Prime Minister Sanae Takaichi may call a snap election in February, according to coalition partner Hirofumi Yoshimura.
A Cautious Stance After Record Highs
The cautious tone in Asia follows a record-breaking Friday in the U.S., where the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average all closed at new all-time highs. However, U.S. equity futures were flat in early Asian trading, indicating a pause as markets digest the dual shocks of potential Middle Eastern escalation and unprecedented scrutiny of the Fed's leadership. Investors are bracing for a week packed with key economic data and corporate earnings, which will now be viewed through the lens of these new uncertainties.
